If you have a spare Android phone with enough storage, and can configure it to mount as a USB mass storage device, maybe you can install an FTP server/Syncthing client/etc. on it, use that to manage the music remotely, and plug it in to your car so that it can see the library.

Android phones usually don’t mount as actual storage devices. The interface is worded that way but it’s different protocol called MTP.

For many phones it is possible to change the exposed protocol from mtp to mass storage. Mass storage does need an image file with fat filesystem to work on most devices. It nowadays is not possible to expose the phones internal storage.

I've worked on DriveDroid. There were indeed people who have done this.

Best example of such a use-case was someone who wanted to make an old printing press fetch files its files from the internet. The press only had an interface for floppy disks. He replaced the floppy disk controller with a floppy emulator that exposed an USB port. Connected a phone with DriveDroid. Synced usb image files from the internet to be exposed over usb mass storage. The image files were fat images that hold the printing job files. They were generated by the server automatically. It worked pretty well from what I heard.

I don't have much idea about these things but is it possible to make a pi act as a usb drive? Then you can plug-in a wifi-enabled pi in the usb slot of your car which can store your music files and grant you tons of control.

There are some SD-cards with Wifi Modules in them around (Toshiba FlashAir for example). Pop one of those in a USB adapter and you're done.

Similar solutions are also popular in the 3D printing space, look up Fysetc or BTT wifi sd cards.